The Restructuring of State Tea Factories and the Brand Era (1990s–2000s)
Before the 1990s, buying pu'er hardly involved choosing a brand: Yunnan's pu'er was produced by a handful of state-owned tea factories, exports went through provincial tea companies, and most wrappers carried the "Zhongcha" logo. By the mid-2000s, though, hundreds or even thousands of brands had appeared on the market. The turning point in between was the restructuring of the state tea factories.
Before Restructuring: The Four Big State Factories
In the planned-economy era, pu'er production was concentrated in a few state-owned factories in Kunming, Menghai, Xiaguan, and Pu'er (Simao). Raw materials were allocated by the state, and products were bought up and exported by the Yunnan Tea Company and the tea import-export company. The factories handled production; they didn't need to find customers or build brands. This history is covered in State Tea Factories in the Planned-Economy Era.
Menghai Tea Factory: From State-Owned to Dayi
Menghai Tea Factory's transformation went roughly like this:
| Year | Event |
|---|---|
| 1988–1989 | Began using the "Dayi" trademark and formally registered it as an export brand |
| 1994 | Began preparing for conversion into a joint-stock company |
| 1996 | Restructured as "Xishuangbanna Menghai Tea Industry Co., Ltd." |
| 1999 | With the provincial company in difficulty, the factory began taking orders on its own |
| October 2004 | Restructured as a private enterprise, acquired in full by Bowin Investment |
This table is compiled from pu'er books cited by Chinese Wikipedia and a 2017 report in the Beijing Youth Daily (which says the factory was taken over in full by the Bowin Group at the end of 2004). From then on, "Menghai Tea Factory" and "Dayi" became almost synonymous. For Dayi's brand and classic recipes, read Dayi and the Menghai Tea Factory.
Xiaguan Tea Factory: From Joint-Stock Company to Private
Xiaguan Tea Factory's predecessor was the Kangzang Tea Factory, founded in 1941 and known for its tuocha and jincha (mushroom-shaped tea). Its restructuring happened in several steps:
- 1994: Xiaguan Tea Factory, the Yunnan Tea Import & Export Company, and other units, together with an employee shareholding association, jointly founded "Yunnan Xiaguan Tuocha Co., Ltd."
- 1999: Reorganized as the Tuocha Group Co., Ltd.
- 2004: After an equity auction, it went private and became today's "Yunnan Xiaguan Tuocha (Group) Co., Ltd." Chinese Wikipedia, citing pu'er books, dates this to April 2004; sources don't fully agree on the details, so it's best understood as "privatization completed between the early 2000s and 2004."
Xiaguan's tuocha, iron cakes, and classic recipes are covered in Xiaguan Tea Factory: Tuocha and Iron Cakes.
Kunming Tea Factory and Pu'er Tea Factory
- Kunming Tea Factory: Took part in developing ripe tea pile fermentation around 1973 and was famous for its 7581 brick. It stopped production in 1992 because of costs, raw-material allocation, and other factors, and formally closed in 1994 after clearing its inventory. Tea sold after 1994 as "7581 Kunming brick" mostly came from other workshops.
- Pu'er Tea Factory (Yunnan Pu'er Tea Group): According to the Beijing Youth Daily, when it was restructured in the autumn of 2004, it was acquired by Hong Kong's Changtai Group for RMB 21 million.
How the Market Changed After Restructuring
- Factories found their own customers: No longer relying on provincial companies to buy everything, factories had to take orders and develop distributors themselves, and brand management became important.
- Brands replaced "Zhongcha": Dayi and Xiaguan Tuocha each strengthened their own trademarks and packaging, and the same recipe code began to command different prices across factories and years.
- More custom-ordered tea: Tea merchants and tea people could commission recipes or packaging directly from factories, and custom teas for Hong Kong and Taiwan were especially active in this period.
- Counterfeits and anti-counterfeiting: Once brands were worth something, counterfeits followed. From the late 1990s to the early 2000s, Menghai Tea Factory began using micro-printing and embossing on its neifei (inner ticket) to deter fakes.
When Did the Flood of Brands Appear?
Private tea factories already existed in the 1990s and peaked in the mid-2000s:
- 1990s: New tea companies such as Changtai and Mengku were founded one after another. In 1999, Zou Bingliang, former director of the Menghai Tea Factory, founded Haiwan Tea Industry, a prime example of a state-factory technician going out on his own.
- Mid-2000s: As pu'er prices kept climbing, new factories and brands popped up one after another. According to a 2009 New York Times report, around the time the bubble burst there were about 3,000 pu'er makers and dealers in the Xishuangbanna area, and at least a third of them went out of business after the crash.
So if you want an answer: branding began in the 1990s, the main state factories completed privatization around 2004, and 2005–2007 is when the number of brands exploded. For other brands, read Chen Sheng Hao, Lao Tong Zhi, Fu Jin, and Smaller Brands; what became of the Zhongcha trademark is in Zhongcha: A New Company Behind an Old Trademark.
What It Means for Tea Drinkers
Restructuring brought choice, and it also brought homework. Buying pu'er today, besides region and vintage, you also need to look at which factory and which batch. Teas all labeled 7542 from the state era, the early post-restructuring years, and recent years may differ in raw material and style. How to read the packaging is covered in How to Read Pu'er Tea Packaging.
FAQ
When did Dayi go private? Menghai Tea Factory was restructured as a limited liability company in 1996 and became a private enterprise in October 2004, acquired in full by Bowin Investment. The "Dayi" trademark was registered in 1989.
How did Xiaguan Tea Factory become private? It first became a joint-stock company in 1994, was reorganized as a group joint-stock company in 1999, and went private through an equity auction in 2004, becoming today's Yunnan Xiaguan Tuocha (Group) Co., Ltd.
How did the market change after restructuring? Factories began taking their own orders and building brands, custom-ordered tea increased, private factories appeared in large numbers, and counterfeits rose as well, so buyers had to start paying attention to brand and batch.
When did the flood of brands appear? Private factories began appearing in the 1990s, state factories privatized around 2004, and the number of new brands peaked in 2005–2007 when pu'er prices were soaring.